Chapter McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 7 7 The Property System

7-2 Property- Broad Sense  Ownership Rights Individual Individual Constitutional Constitutional  Excludes State From Interference  “Liberty”  Ownership Rights Individual Individual Constitutional Constitutional  Excludes State From Interference  “Liberty”

7-3 Property  Private, Exclusive, Rights In Resources- Ownership  Owners Can: Possess Possess Use Use Transfer (e.g. Sell, Donate, etc.) Transfer (e.g. Sell, Donate, etc.) Prevent Interference Prevent Interference Use as Collateral Use as Collateral  Basis For Private Market  Private, Exclusive, Rights In Resources- Ownership  Owners Can: Possess Possess Use Use Transfer (e.g. Sell, Donate, etc.) Transfer (e.g. Sell, Donate, etc.) Prevent Interference Prevent Interference Use as Collateral Use as Collateral  Basis For Private Market

7-4 Property  LUCAS v. SOUTH CAROLINA COASTAL COUNCIL  505 U.S.1003 (1992), p.189  FACTS:In 1986 petitioner David H. Lucas paid $975,000 for two residential lots on the Isle of Palms in Charleston County, South Carolina, on which he intended to build single-family homes. In 1998 the South Carolina Legislature enacted the Beachfront Management Act which barred Lucas from erecting any permanent habitable structures on the lots. Lucas sued.  ISSUE:Does the Act’s complete extinguishment of the lots’ value entitle Lucas to compensation for a taking?   LUCAS v. SOUTH CAROLINA COASTAL COUNCIL  505 U.S.1003 (1992), p.189  FACTS:In 1986 petitioner David H. Lucas paid $975,000 for two residential lots on the Isle of Palms in Charleston County, South Carolina, on which he intended to build single-family homes. In 1998 the South Carolina Legislature enacted the Beachfront Management Act which barred Lucas from erecting any permanent habitable structures on the lots. Lucas sued.  ISSUE:Does the Act’s complete extinguishment of the lots’ value entitle Lucas to compensation for a taking? 

7-5 Property  LUCAS v. SOUTH CAROLINA COASTAL COUNCIL  505 U.S.1003 (1992), p.189   DECISION:Yes.  REASONS: 1. Where the statute deprives land of all economically beneficial use, it must compensate the owner unless the prescribed use interests were not part of the title to begin with. 1. Where the statute deprives land of all economically beneficial use, it must compensate the owner unless the prescribed use interests were not part of the title to begin with. 2. The case is remanded to determine if the land has been deprived of all economically beneficial use. 2. The case is remanded to determine if the land has been deprived of all economically beneficial use.  LUCAS v. SOUTH CAROLINA COASTAL COUNCIL  505 U.S.1003 (1992), p.189   DECISION:Yes.  REASONS: 1. Where the statute deprives land of all economically beneficial use, it must compensate the owner unless the prescribed use interests were not part of the title to begin with. 1. Where the statute deprives land of all economically beneficial use, it must compensate the owner unless the prescribed use interests were not part of the title to begin with. 2. The case is remanded to determine if the land has been deprived of all economically beneficial use. 2. The case is remanded to determine if the land has been deprived of all economically beneficial use.

7-6 Property  In Federalist Paper 10, James Madison wrote: “Property … in its particular application means that ‘domination which one man claims and exercises over the external things of the world, in exclusion of every other individual.’ In its larger and juster meaning, it embraces everything to which a man may attach a value and have a right; and which leaves to everyone else a like advantage. In the former sense, a man’s land, or merchandise, or money is called his property. In the latter sense, a man has property in his opinions and the free communication of them. He has a property of peculiar value in his religious opinions, and in the profession and practice dictated by them. He has property very dear to him in the safety and liberty of his person. He has an equal property in the free use of his faculties and free choice of the objects on which to employ them. In a word, as a man is said to have a right to his property, he may be equally said to have a property in his rights.”

7-7 The Property System  Unlimited Resources = No Problem  Limited Resources = Problem  Communism- State Ownership & Control  Capitalism- Individual Owns Private Property, Within State Limitations  Unlimited Resources = No Problem  Limited Resources = Problem  Communism- State Ownership & Control  Capitalism- Individual Owns Private Property, Within State Limitations

7-8 Property Usage  Private  Public  Common/Mixed  Private  Public  Common/Mixed

7-9 Property & Prosperity  Central Business Environment Business Environment Society’s Achievement Society’s Achievement  Property Promotes Incentive Promotes Incentive Aids In Capital Formation- Mortgage Aids In Capital Formation- Mortgage Divisibility Divisibility  Central Business Environment Business Environment Society’s Achievement Society’s Achievement  Property Promotes Incentive Promotes Incentive Aids In Capital Formation- Mortgage Aids In Capital Formation- Mortgage Divisibility Divisibility

7-10 Property Division  Real- Requires Written Agreements Land Land Interest In Land- Fixture Interest In Land- Fixture  Personal- Property That Is Not Real, Movable, Tangible  Real- Requires Written Agreements Land Land Interest In Land- Fixture Interest In Land- Fixture  Personal- Property That Is Not Real, Movable, Tangible

7-11 Real Property- Elements  Includes land, permanent structures & things attached thereto (fixtures, e.g. ceiling fan)  Air & Subsurface? Duty of Support Duty of Support  Plant Life & Vegetation (e.g. Timber rights) (e.g. Timber rights)  Includes land, permanent structures & things attached thereto (fixtures, e.g. ceiling fan)  Air & Subsurface? Duty of Support Duty of Support  Plant Life & Vegetation (e.g. Timber rights) (e.g. Timber rights)

7-12 Scope of Real Property  Fixtures- Factors Attachment - Cannot be removed without damage to the real property Attachment - Cannot be removed without damage to the real property Constructively Annexed (e.g. garage door opener) Constructively Annexed (e.g. garage door opener) Adaptation - necessary or beneficial use (e.g. key, custom window screen) Adaptation - necessary or beneficial use (e.g. key, custom window screen) Intent of Installer Intent of Installer  Fixtures- Factors Attachment - Cannot be removed without damage to the real property Attachment - Cannot be removed without damage to the real property Constructively Annexed (e.g. garage door opener) Constructively Annexed (e.g. garage door opener) Adaptation - necessary or beneficial use (e.g. key, custom window screen) Adaptation - necessary or beneficial use (e.g. key, custom window screen) Intent of Installer Intent of Installer

7-13 Scope of Real Property  Express Agreement (as in Real Estate sales contract)  Trade Fixtures - used in carrying on business Where no substantial damage Where no substantial damage Removed by lease end Removed by lease end No express agreement identifying as fixtures No express agreement identifying as fixtures  Express Agreement (as in Real Estate sales contract)  Trade Fixtures - used in carrying on business Where no substantial damage Where no substantial damage Removed by lease end Removed by lease end No express agreement identifying as fixtures No express agreement identifying as fixtures

7-14 Rights/Interests in Real Property  Fee Simple Right to entire property Right to entire property For unlimited duration For unlimited duration With Unconditional power to dispose of With Unconditional power to dispose of  Life Estate Use for a life time Use for a life time  Leasehold Right of occupancy for a period of time Right of occupancy for a period of time If time not specified = Tenancy at Will (I.e. Either can terminate with minimal notice) If time not specified = Tenancy at Will (I.e. Either can terminate with minimal notice)  Fee Simple Right to entire property Right to entire property For unlimited duration For unlimited duration With Unconditional power to dispose of With Unconditional power to dispose of  Life Estate Use for a life time Use for a life time  Leasehold Right of occupancy for a period of time Right of occupancy for a period of time If time not specified = Tenancy at Will (I.e. Either can terminate with minimal notice) If time not specified = Tenancy at Will (I.e. Either can terminate with minimal notice)

7-15 Rights/Interests in Real Property  Easement - Limited right of use, not occupancy Limited right of use, not occupancy By grant, gift or contract By grant, gift or contract Affirmative - Right to a certain use (e.g. to drive across, run a power or sewer line through, etc.) Affirmative - Right to a certain use (e.g. to drive across, run a power or sewer line through, etc.) Negative - Right to prevent a certain use (e.g. to construct a building blocking a view, etc.) Negative - Right to prevent a certain use (e.g. to construct a building blocking a view, etc.) Necessity - Often implied where sale (e.g. right to cross where only way to property) Necessity - Often implied where sale (e.g. right to cross where only way to property) By Prescription/Adverse Possession By Prescription/Adverse Possession  Easement - Limited right of use, not occupancy Limited right of use, not occupancy By grant, gift or contract By grant, gift or contract Affirmative - Right to a certain use (e.g. to drive across, run a power or sewer line through, etc.) Affirmative - Right to a certain use (e.g. to drive across, run a power or sewer line through, etc.) Negative - Right to prevent a certain use (e.g. to construct a building blocking a view, etc.) Negative - Right to prevent a certain use (e.g. to construct a building blocking a view, etc.) Necessity - Often implied where sale (e.g. right to cross where only way to property) Necessity - Often implied where sale (e.g. right to cross where only way to property) By Prescription/Adverse Possession By Prescription/Adverse Possession

7-16 Rights/Interests in Real Property  Easement Appurtenant Appurtenant  Belongs to the land not the person  Therefore passes with the land  Property benefiting = dominant tenement  Property subject is servient Gross Gross  Belongs to person, not land  Does not pass with transfer of land  Easement Appurtenant Appurtenant  Belongs to the land not the person  Therefore passes with the land  Property benefiting = dominant tenement  Property subject is servient Gross Gross  Belongs to person, not land  Does not pass with transfer of land

7-17 Rights/Interests in Real Property  License revocable revocable temporary use temporary use like an easement like an easement but not an interest in land but not an interest in land may be oral may be oral (e.g. to hunt or fish) (e.g. to hunt or fish)  License revocable revocable temporary use temporary use like an easement like an easement but not an interest in land but not an interest in land may be oral may be oral (e.g. to hunt or fish) (e.g. to hunt or fish)

7-18 Rights/Interests in Real Property  Profit right of entry right of entry to take product(s) from the land to take product(s) from the land e.g. timber right e.g. timber right  Profit right of entry right of entry to take product(s) from the land to take product(s) from the land e.g. timber right e.g. timber right

7-19 Rights/Interests in Real Property  Private Restrictions Validity depends on: Validity depends on:  Purpose - Reasonable & Not vs. Public Policy  Nature  Scope  Private Restrictions Validity depends on: Validity depends on:  Purpose - Reasonable & Not vs. Public Policy  Nature  Scope

7-20 Co-Ownership  Tenancy in Common   Also called “sole and several tenancy”   Two or more persons   Separate but undivided interest in a property   Each has the right to sell, give, or will his share   Subsequent owner acquires same portion of title  Tenancy in Common   Also called “sole and several tenancy”   Two or more persons   Separate but undivided interest in a property   Each has the right to sell, give, or will his share   Subsequent owner acquires same portion of title

7-21 Co-Ownership  Tenancy in Common   No right of survivorship   Only requirement to create = an equal right of possession   Interests do not have to be equal, i.e. co-tenants may own greater or lesser interests   Individual owners   Can convert from tenancy in common to joint tenancy using a straw man  Tenancy in Common   No right of survivorship   Only requirement to create = an equal right of possession   Interests do not have to be equal, i.e. co-tenants may own greater or lesser interests   Individual owners   Can convert from tenancy in common to joint tenancy using a straw man

7-22 Co-Ownership  Tenancy in Common   For example, A and B own a parcel of property as Tenants in Common. A has an undivided forty percent (40%) ownership interest, and B has an undivided sixty percent (60%) ownership interest. A still has the right to possess and enjoy the property in a manner equal to that of B, so long as the concurrent ownership lasts.  Tenancy in Common   For example, A and B own a parcel of property as Tenants in Common. A has an undivided forty percent (40%) ownership interest, and B has an undivided sixty percent (60%) ownership interest. A still has the right to possess and enjoy the property in a manner equal to that of B, so long as the concurrent ownership lasts.

7-23 Co-Ownership  Tenancy in Common Undivided interests, equal right of possession Undivided interests, equal right of possession Presumed where transfer to more than one owner and no other specification Presumed where transfer to more than one owner and no other specification  Tenancy in Common Undivided interests, equal right of possession Undivided interests, equal right of possession Presumed where transfer to more than one owner and no other specification Presumed where transfer to more than one owner and no other specification

7-24 Co-Ownership  Destruction of Tenancy in Common Where the parties to a tenancy in common wish to destroy the joint interest, they can do so through a partition of the property - a division of the land into distinctly owned plots. If the parties are unable to agree to a partition, any or all of them may seek the ruling of a court to determine how the land should be divided up, physically divide it between the joint owners, leaving each with ownership of a portion of the property representing their share  Destruction of Tenancy in Common Where the parties to a tenancy in common wish to destroy the joint interest, they can do so through a partition of the property - a division of the land into distinctly owned plots. If the parties are unable to agree to a partition, any or all of them may seek the ruling of a court to determine how the land should be divided up, physically divide it between the joint owners, leaving each with ownership of a portion of the property representing their share

7-25 Co-Ownership  Joint Tenancy- Right of Survivorship More complex than tenancy in common Each cotenant is considered to be owner of an undivided part and the whole  Joint Tenancy- Right of Survivorship More complex than tenancy in common Each cotenant is considered to be owner of an undivided part and the whole

7-26 Co-Ownership  Joint Tenancy- Right of Survivorship Equal interests Equal interests Must be specified Must be specified Upon death of one, automatic pass to survivor(s) Upon death of one, automatic pass to survivor(s) Sale of part, breaks as to that interest, becomes tenancy in common Sale of part, breaks as to that interest, becomes tenancy in common  Joint Tenancy- Right of Survivorship Equal interests Equal interests Must be specified Must be specified Upon death of one, automatic pass to survivor(s) Upon death of one, automatic pass to survivor(s) Sale of part, breaks as to that interest, becomes tenancy in common Sale of part, breaks as to that interest, becomes tenancy in common

7-27 Co-Ownership  Joint Tenancy- Right of Survivorship   To create, all joint tenants must acquire their title by the “Four Unities” (title, time, interest and possession) = all must acquire their interests by the same conveyance (if the deed places a condition on one tenant and not the other, they do not have the same title, and the attempt to create a JTWROS is invalid), at the same time, with equal rights in re: title and possession (if one owner can prove that he or she has been improperly excluded from the property by the other, the JTWROS will be invalidated).   Note: Some states have abolished the Four Unities requirement and allow creation of joint tenancies solely by explicit written declaration  Joint Tenancy- Right of Survivorship   To create, all joint tenants must acquire their title by the “Four Unities” (title, time, interest and possession) = all must acquire their interests by the same conveyance (if the deed places a condition on one tenant and not the other, they do not have the same title, and the attempt to create a JTWROS is invalid), at the same time, with equal rights in re: title and possession (if one owner can prove that he or she has been improperly excluded from the property by the other, the JTWROS will be invalidated).   Note: Some states have abolished the Four Unities requirement and allow creation of joint tenancies solely by explicit written declaration

7-28 Co-Ownership  Joint Tenancy- Right of Survivorship For example, A and B each own a one-half interest in Blackacre as joint tenants with right of survivorship, and A dies. Upon the death of A, A’s interest automatically conveys to B, and B becomes the sole owner of Blackacre. Alternatively, A, B, and C each own a one-third interest in Blackacre as joint tenants with right of survivorship, and A dies. Then, A’s interest will automatically convey to B and C, and, subsequently, they will both own a one-half interest in Blackacre. For example, A and B each own a one-half interest in Blackacre as joint tenants with right of survivorship, and A dies. Upon the death of A, A’s interest automatically conveys to B, and B becomes the sole owner of Blackacre. Alternatively, A, B, and C each own a one-third interest in Blackacre as joint tenants with right of survivorship, and A dies. Then, A’s interest will automatically convey to B and C, and, subsequently, they will both own a one-half interest in Blackacre.  Joint Tenancy- Right of Survivorship For example, A and B each own a one-half interest in Blackacre as joint tenants with right of survivorship, and A dies. Upon the death of A, A’s interest automatically conveys to B, and B becomes the sole owner of Blackacre. Alternatively, A, B, and C each own a one-third interest in Blackacre as joint tenants with right of survivorship, and A dies. Then, A’s interest will automatically convey to B and C, and, subsequently, they will both own a one-half interest in Blackacre. For example, A and B each own a one-half interest in Blackacre as joint tenants with right of survivorship, and A dies. Upon the death of A, A’s interest automatically conveys to B, and B becomes the sole owner of Blackacre. Alternatively, A, B, and C each own a one-third interest in Blackacre as joint tenants with right of survivorship, and A dies. Then, A’s interest will automatically convey to B and C, and, subsequently, they will both own a one-half interest in Blackacre.

7-29 Co-Ownership  Tenancy by Entirety Also requires four unities, but adds a fifth, unity of person (i.e. marriage) Currently 22 states retain this Currently 22 states retain this Like Joint Tenancy Like Joint Tenancy At death, automatic transfer to the other spouse But both must agree to convey But both must agree to convey Divorce severs Divorce severs  Tenancy by Entirety Also requires four unities, but adds a fifth, unity of person (i.e. marriage) Currently 22 states retain this Currently 22 states retain this Like Joint Tenancy Like Joint Tenancy At death, automatic transfer to the other spouse But both must agree to convey But both must agree to convey Divorce severs Divorce severs

7-30 Co-Ownership   Co-tenants, irrespective of the type of tenancy, share certain rights and duties in relation to the property:   Access: In theory, each tenant has an unrestricted right of access to the property, regardless of the size of their fractal interest. Thus, under the majority view, even a cotenant in exclusive possession of the property is not liable to the other co-tenants for rent, absent an ouster. Where one co-tenant wrongfully excludes another from making use of the property, the excluded co-tenant can bring a cause of action for ouster, and may receive the fair rental value of the property for the time that he was dispossessed.   Co-tenants, irrespective of the type of tenancy, share certain rights and duties in relation to the property:   Access: In theory, each tenant has an unrestricted right of access to the property, regardless of the size of their fractal interest. Thus, under the majority view, even a cotenant in exclusive possession of the property is not liable to the other co-tenants for rent, absent an ouster. Where one co-tenant wrongfully excludes another from making use of the property, the excluded co-tenant can bring a cause of action for ouster, and may receive the fair rental value of the property for the time that he was dispossessed.

7-31 Co-Ownership   Co-tenants, irrespective of the type of tenancy, share certain rights and duties in relation to the property:   Accounting: Each tenant has a right to an accounting of rents and profits made from the property. If the property generates income, each tenant is entitled to a pro-rata proportion of that income.   Co-tenants, irrespective of the type of tenancy, share certain rights and duties in relation to the property:   Accounting: Each tenant has a right to an accounting of rents and profits made from the property. If the property generates income, each tenant is entitled to a pro-rata proportion of that income.

7-32 Co-Ownership   Co-tenants, irrespective of the type of tenancy, share certain rights and duties in relation to the property:   Contribution: Each co-tenant can be forced to contribute to the payment of expenses such as property taxes and related assessments, mortgages on the entire property, and repairs. However, normally co-tenants have no obligation to contribute to any costs of improving the property. Furthermore, each co-tenant can independently encumber their own share in the property by taking out a mortgage on that share; other co-tenants have no obligation to help pay a mortgage that only runs to another tenant's share of the property, and the mortgagee can only foreclose on that share.   Co-tenants, irrespective of the type of tenancy, share certain rights and duties in relation to the property:   Contribution: Each co-tenant can be forced to contribute to the payment of expenses such as property taxes and related assessments, mortgages on the entire property, and repairs. However, normally co-tenants have no obligation to contribute to any costs of improving the property. Furthermore, each co-tenant can independently encumber their own share in the property by taking out a mortgage on that share; other co-tenants have no obligation to help pay a mortgage that only runs to another tenant's share of the property, and the mortgagee can only foreclose on that share.

7-33 Co-Ownership  Community Property Primarily Western States Primarily Western States Property acquired during marriage is community Property acquired during marriage is community Joint consent needed to convey Joint consent needed to convey Pre-owned, gifts, inheritance excluded Pre-owned, gifts, inheritance excluded  Community Property Primarily Western States Primarily Western States Property acquired during marriage is community Property acquired during marriage is community Joint consent needed to convey Joint consent needed to convey Pre-owned, gifts, inheritance excluded Pre-owned, gifts, inheritance excluded

7-34 Co-Ownership  Tenancy in Partnership  Partnership takes title to  Condominium  Title to individual unit  Tenant in Common as to common areas  Cooperative Ownership  Corporate Unit/Stock  Proprietary Lease  May need corporate approval to convey or sublet  Tenancy in Partnership  Partnership takes title to  Condominium  Title to individual unit  Tenant in Common as to common areas  Cooperative Ownership  Corporate Unit/Stock  Proprietary Lease  May need corporate approval to convey or sublet

7-35 Acquisition of Real Property Purchase Purchase Gift Gift Will or Inheritance Will or Inheritance Tax Sale Tax Sale Purchase Purchase Gift Gift Will or Inheritance Will or Inheritance Tax Sale Tax Sale

7-36 Acquisition of Real Property Adverse Possession (Prescription) Adverse Possession (Prescription)  Actual and exclusive.  Open, visible and notorious.  Continuous and peaceable.  Hostile and adverse.  For Statutory Period Adverse Possession (Prescription) Adverse Possession (Prescription)  Actual and exclusive.  Open, visible and notorious.  Continuous and peaceable.  Hostile and adverse.  For Statutory Period

7-37 Steps in Sale  Contract to Sell  Conditions  Addendums  Earnest Money  Negotiate/Sign  Arrange Financing  Close- Deliver Deed  Title Search  Inspections  Record Deed  Title Recheck  Race Statute  Notice-Race Statute  Contract to Sell  Conditions  Addendums  Earnest Money  Negotiate/Sign  Arrange Financing  Close- Deliver Deed  Title Search  Inspections  Record Deed  Title Recheck  Race Statute  Notice-Race Statute

7-38 Transfer By Sale  Real Estate Brokers/Agents- Listing Contract Open vs. Exclusive Open vs. Exclusive  Listing  Right of sale  Contract for Sale  Financing Federal Disclosure Federal Disclosure Fair Housing Act Fair Housing Act  Steering  Real Estate Brokers/Agents- Listing Contract Open vs. Exclusive Open vs. Exclusive  Listing  Right of sale  Contract for Sale  Financing Federal Disclosure Federal Disclosure Fair Housing Act Fair Housing Act  Steering

7-39 Deeds  Grantor v. Grantee  Quitclaim (no guarantees)  Warranty General (against all title defects) General (against all title defects) Special (against specific title defects) Special (against specific title defects) Implied Warranty of Habitability Implied Warranty of Habitability  Grantor v. Grantee  Quitclaim (no guarantees)  Warranty General (against all title defects) General (against all title defects) Special (against specific title defects) Special (against specific title defects) Implied Warranty of Habitability Implied Warranty of Habitability

7-40 Deeds  Form/Execution- Acknowledgment  Record  Register of Deeds  Title  Search/Abstract  Merchantable  Torrens  Title Insurance Tacking Tacking  Form/Execution- Acknowledgment  Record  Register of Deeds  Title  Search/Abstract  Merchantable  Torrens  Title Insurance Tacking Tacking

7-41 Deed Requirements  Names of Grantor/Buyer & Grantee/Seller  Intent to Convey  Description  Signature  Names of Grantor/Buyer & Grantee/Seller  Intent to Convey  Description  Signature

7-42 Land Use Controls  Societal Restraints  No injurious use  Reasonable Regulation  Eminent Domain “Public Use”? (consider Kelo Case) “Public Use”? (consider Kelo Case)  Societal Restraints  No injurious use  Reasonable Regulation  Eminent Domain “Public Use”? (consider Kelo Case) “Public Use”? (consider Kelo Case)

7-43 Land Use Controls  Nuisance Law Private Nuisance Private Nuisance  Private Plaintiff  Remedies: Injunction or Damages Injunction or Damages Public Nuisance Public Nuisance  Harm to Public e.g. drug traffic e.g. drug traffic  Nuisance Law Private Nuisance Private Nuisance  Private Plaintiff  Remedies: Injunction or Damages Injunction or Damages Public Nuisance Public Nuisance  Harm to Public e.g. drug traffic e.g. drug traffic

7-44 Other Real Property Conditions- Expansion  Premises Liability Reasonable Care Reasonable Care Foreseeability Foreseeability Security Precautions Security Precautions  Premises Liability Reasonable Care Reasonable Care Foreseeability Foreseeability Security Precautions Security Precautions

7-45 Other Real Property Conditions- Expansion  ADA (1990) Public Accommodation Public Accommodation Modifications Modifications New Construction New Construction Remedies: Injunction Remedies: Injunction  ADA (1990) Public Accommodation Public Accommodation Modifications Modifications New Construction New Construction Remedies: Injunction Remedies: Injunction

7-46 Other Real Property Conditions- Zoning  Police Power - Control  Use  Height & Bulk  Population Density  Aesthetics  Variance Where undue hardship Where undue hardship Often very political Often very political  Police Power - Control  Use  Height & Bulk  Population Density  Aesthetics  Variance Where undue hardship Where undue hardship Often very political Often very political

7-47 Other Real Property Conditions- Zoning  Police Power - Control Subdivision Ordinance (e.g. P.U.D.s) Subdivision Ordinance (e.g. P.U.D.s) Inverse Condemnation Inverse Condemnation Taking w/o compensation Taking w/o compensation  Police Power - Control Subdivision Ordinance (e.g. P.U.D.s) Subdivision Ordinance (e.g. P.U.D.s) Inverse Condemnation Inverse Condemnation Taking w/o compensation Taking w/o compensation

7-48 Leases & Tenancies  Landlord-Tenant Relationship  Nature of Leases Contract Contract Landlord/Lessor Landlord/Lessor Tenant/Lessee Tenant/Lessee Leasehold Estate Leasehold Estate  Landlord-Tenant Relationship  Nature of Leases Contract Contract Landlord/Lessor Landlord/Lessor Tenant/Lessee Tenant/Lessee Leasehold Estate Leasehold Estate

7-49 Classification of Tenancies  Term of years  Begin on fixed date; end on fixed date  No notice necessary to terminate-fixed by lease  Periodic tenancy  Renews for period to period (e.g. month to month)  Notice to terminate varies with period/jurisdiction  Tenancy at will  No notice necessary to terminate  Tenancy at Sufferance (Holdover)  Option 1 - Treat as trespasser, pursue eviction  Option 2- Continue to rent to

7-50 Formalities  Statute of Frauds More than a year, must be in writing to be enforceable More than a year, must be in writing to be enforceable In some states, when more than 3 years In some states, when more than 3 years

7-51 Landlord  Rights- Security Deposits Keep in account Keep in account Return or written accounting typically required with 30 days Return or written accounting typically required with 30 days  Rights- Security Deposits Keep in account Keep in account Return or written accounting typically required with 30 days Return or written accounting typically required with 30 days

7-52 Landlord  Duties Fair Housing Act - Anti-Discrimination Fair Housing Act - Anti-Discrimination  Exceptions (e.g. single-family dwelling) Implied Warranties Implied Warranties  Possession  Quiet Enjoyment (Non-Interference)  Habitability Safe & Suitable Safe & Suitable Duty to so maintain Duty to so maintain Remedies for Breach Remedies for Breach Damages Damages Termination of Lease Termination of Lease Rent Abatement Rent Abatement Repair & Deduct Repair & Deduct  Duties Fair Housing Act - Anti-Discrimination Fair Housing Act - Anti-Discrimination  Exceptions (e.g. single-family dwelling) Implied Warranties Implied Warranties  Possession  Quiet Enjoyment (Non-Interference)  Habitability Safe & Suitable Safe & Suitable Duty to so maintain Duty to so maintain Remedies for Breach Remedies for Breach Damages Damages Termination of Lease Termination of Lease Rent Abatement Rent Abatement Repair & Deduct Repair & Deduct

7-53 Constructive Eviction-General Requirements  Occurs where L wrongfully performs or fails to perform some duty that L is obligated to perform resulting in T’s substantial loss of use and enjoyment of the premises  Four elements L must wrongfully perform or fail to perform some obligation that L is under some expressed or implied duty to perform L must wrongfully perform or fail to perform some obligation that L is under some expressed or implied duty to perform As a result there is a substantial interference with T’s use and enjoyment of premises As a result there is a substantial interference with T’s use and enjoyment of premises Notice from T to L and reasonable opportunity to remedy interference Notice from T to L and reasonable opportunity to remedy interference T must vacate within a reasonable time T must vacate within a reasonable time

7-54 Landlord- Tort Liability  Traditional No-Liability Exceptions Exceptions  Duty to maintain common areas  Duty to disclose hidden effects  Duty to use reasonable care in repairs  Duty to maintain property for admission to public  Duty to maintain furnished dwellings  Traditional No-Liability Exceptions Exceptions  Duty to maintain common areas  Duty to disclose hidden effects  Duty to use reasonable care in repairs  Duty to maintain property for admission to public  Duty to maintain furnished dwellings

7-55 Liability For Injuries on the Premises  Landlord is liable to Tenants and Licensees (Tenant’s guests) based on who has the right to controls the area where the injury occurred.  Landlord is liable for injuries caused by defects in common areas. “Attractive nuisance” doctrine for children and an unfenced swimming pool.  Landlord is liable to Tenants and Licensees (Tenant’s guests) based on who has the right to controls the area where the injury occurred.  Landlord is liable for injuries caused by defects in common areas. “Attractive nuisance” doctrine for children and an unfenced swimming pool.

7-56 Liability for Injuries  If Landlord makes any repairs, they must be done with reasonable care.  LL may be liable for injuries caused by crimes or third persons when reasonably foreseeable.  Exculpatory clauses may be unenforceable if injury results from violation of statutory duty.  If Landlord makes any repairs, they must be done with reasonable care.  LL may be liable for injuries caused by crimes or third persons when reasonably foreseeable.  Exculpatory clauses may be unenforceable if injury results from violation of statutory duty.

7-57 Liability For Injuries  Tenant’s Liability? Tenant has a duty to maintain safe conditions in those areas under her control. Tenant has a duty to maintain safe conditions in those areas under her control. In commercial leases, both Landlord and Tenant may be responsible and liable for same area. In commercial leases, both Landlord and Tenant may be responsible and liable for same area.  Tenant’s Liability? Tenant has a duty to maintain safe conditions in those areas under her control. Tenant has a duty to maintain safe conditions in those areas under her control. In commercial leases, both Landlord and Tenant may be responsible and liable for same area. In commercial leases, both Landlord and Tenant may be responsible and liable for same area.

7-58 Tenant Duties Pay Rent Pay Rent  If multiple tenants,  joint & several liability Not Commit Waste Not Commit Waste  Not normal wear & tear  Reasonable steps to protect Proper/Agreed Upon Use Proper/Agreed Upon Use Reasonable care in use & maintenance Reasonable care in use & maintenance Comply with terms of lease Comply with terms of lease Pay Rent Pay Rent  If multiple tenants,  joint & several liability Not Commit Waste Not Commit Waste  Not normal wear & tear  Reasonable steps to protect Proper/Agreed Upon Use Proper/Agreed Upon Use Reasonable care in use & maintenance Reasonable care in use & maintenance Comply with terms of lease Comply with terms of lease

7-59 Transfer of Lease  Assignment By landlord or tenant By landlord or tenant Transfers Rights & Duties Transfers Rights & Duties Tenant remains liable Tenant remains liable  Subleasing By tenant By tenant Right often limited by lease Right often limited by lease No transfer all tenant’s rights & duties No transfer all tenant’s rights & duties Tenant Remains Liable Tenant Remains Liable  Assignment By landlord or tenant By landlord or tenant Transfers Rights & Duties Transfers Rights & Duties Tenant remains liable Tenant remains liable  Subleasing By tenant By tenant Right often limited by lease Right often limited by lease No transfer all tenant’s rights & duties No transfer all tenant’s rights & duties Tenant Remains Liable Tenant Remains Liable

7-60 Termination of Leasehold  Eviction No Self-Help No Self-Help Statutory Procedure Statutory Procedure Possible Lien on Tenant’s Property Possible Lien on Tenant’s Property  Mutual Agreement to Surrender  Abandonment  Eviction No Self-Help No Self-Help Statutory Procedure Statutory Procedure Possible Lien on Tenant’s Property Possible Lien on Tenant’s Property  Mutual Agreement to Surrender  Abandonment

7-61 Termination of Tenancies by Tenant’s Wrongful Conduct  Landlord’s remedies Acceptance of surrender and terminate the lease Acceptance of surrender and terminate the lease  Express  Implied Hold T to terms of the lease Hold T to terms of the lease  Sue for rents as they become due  Sue from past-due rents Duty to mitigate (Waiver) (Not followed in all states) Duty to mitigate (Waiver) (Not followed in all states)  URLTA 4.203(c) “If the landlord fails to use reasonable efforts to rent the dwelling unit at a fair rental… the rental agreement is deemed to be terminated by the landlord as of the date the landlord has notice of the abandonment”

7-62 Terminology  Will maker:Testator (male), Testatrix (female)  Bequest/Legacy: Gift of personal property If gone before death = ademption If gone before death = ademption  Devise: Gift of real property  Residuary: What’s left over, not otherwise specified  Issue = lineal descendents (children, grandchildren, etc.)  Per Capita= look at whose actually living at same level, equally divide  Per Stirpes/ Right of Representation = by the line  Will maker:Testator (male), Testatrix (female)  Bequest/Legacy: Gift of personal property If gone before death = ademption If gone before death = ademption  Devise: Gift of real property  Residuary: What’s left over, not otherwise specified  Issue = lineal descendents (children, grandchildren, etc.)  Per Capita= look at whose actually living at same level, equally divide  Per Stirpes/ Right of Representation = by the line

7-63 Wills  Testamentary Capacity sound mind (at the time, “period of lucidity”) sound mind (at the time, “period of lucidity”) legal age (per state) legal age (per state) no fraud or undo influence no fraud or undo influence  Testamentary Capacity sound mind (at the time, “period of lucidity”) sound mind (at the time, “period of lucidity”) legal age (per state) legal age (per state) no fraud or undo influence no fraud or undo influence

7-64 Wills  Execution- Attestation Clause (formalities)  Joint/Mutual Wills  Limitations on Disposition  Revocation  Execution- Attestation Clause (formalities)  Joint/Mutual Wills  Limitations on Disposition  Revocation

7-65 Informal Wills  Formal Writing Writing Witnesses (disinterested) Witnesses (disinterested) Signed by or for at direction of, in presence of witnesses Signed by or for at direction of, in presence of witnesses Witnesses must sign in sight of Witnesses must sign in sight of Acknowledgements (Makes Self-Proving) Acknowledgements (Makes Self-Proving)  Formal Writing Writing Witnesses (disinterested) Witnesses (disinterested) Signed by or for at direction of, in presence of witnesses Signed by or for at direction of, in presence of witnesses Witnesses must sign in sight of Witnesses must sign in sight of Acknowledgements (Makes Self-Proving) Acknowledgements (Makes Self-Proving)

7-66 Informal Wills  Holographic (Handwritten) entirely in handwriting entirely in handwriting evidence of intent evidence of intent legality varies by jurisdiction legality varies by jurisdiction  Noncupative (Oral) given limited effect given limited effect  Holographic (Handwritten) entirely in handwriting entirely in handwriting evidence of intent evidence of intent legality varies by jurisdiction legality varies by jurisdiction  Noncupative (Oral) given limited effect given limited effect

7-67 Limitations on Disposition  Common law dower & curtsey (1/3 to surviving spouse)  Statutory shares  Pretermitted (Born after, assumed intended inclusion)  Revocation- until death = no present interest  Codicil-amendment (usually for minor/limited changes)  Common law dower & curtsey (1/3 to surviving spouse)  Statutory shares  Pretermitted (Born after, assumed intended inclusion)  Revocation- until death = no present interest  Codicil-amendment (usually for minor/limited changes)

7-68 Advance Directives  Living Wills  Durable Power of Attorney- Authority to Act Principal Principal Attorney in Fact Attorney in Fact Limited Limited Springing Springing Health Care Health Care  Federal Law/Advance Directives  Living Wills  Durable Power of Attorney- Authority to Act Principal Principal Attorney in Fact Attorney in Fact Limited Limited Springing Springing Health Care Health Care  Federal Law/Advance Directives

7-69 If No Valid Will  Intestacy based on domicile Varies by state Varies by state  Simultaneous Death = Distribute each as if they survived the other  Intestacy based on domicile Varies by state Varies by state  Simultaneous Death = Distribute each as if they survived the other

7-70 Administration of Estates  Probate Estate = Property at Death Estate = Property at Death Process Process  Determining Existence of Will  Finding witnesses if not self-proving  Executor/Executrix/Administrator/Personal Representative Bond Bond Fiduciary Duty Fiduciary Duty Settlement tasks Settlement tasks  Probate Estate = Property at Death Estate = Property at Death Process Process  Determining Existence of Will  Finding witnesses if not self-proving  Executor/Executrix/Administrator/Personal Representative Bond Bond Fiduciary Duty Fiduciary Duty Settlement tasks Settlement tasks

7-71 Trusts- Terminology  Trust General General Inter Vivos - Effective during lifetime Inter Vivos - Effective during lifetime Testamentary- Effective at death Testamentary- Effective at death  Settlor/Trustor = maker  Trustee=holder  Beneficiary  Corpus/Res=property  Trust General General Inter Vivos - Effective during lifetime Inter Vivos - Effective during lifetime Testamentary- Effective at death Testamentary- Effective at death  Settlor/Trustor = maker  Trustee=holder  Beneficiary  Corpus/Res=property

7-72 Trusts  Express Capacity Capacity Intent/Formalities Intent/Formalities Conveyance of specific property Conveyance of specific property Purpose Purpose Clear identity of beneficiaries Clear identity of beneficiaries  Express Capacity Capacity Intent/Formalities Intent/Formalities Conveyance of specific property Conveyance of specific property Purpose Purpose Clear identity of beneficiaries Clear identity of beneficiaries

7-73 Trusts  Rule Against Perpetuities (Dead hand control) Beneficiary must be determinable by a certain time Beneficiary must be determinable by a certain time  Charitable- Doctrine of Cy Pres = try to honor probable intention  Spendthrift  Totten - Bank account in name of another = revocable living trust  Rule Against Perpetuities (Dead hand control) Beneficiary must be determinable by a certain time Beneficiary must be determinable by a certain time  Charitable- Doctrine of Cy Pres = try to honor probable intention  Spendthrift  Totten - Bank account in name of another = revocable living trust

7-74 Trusts  Resulting = created to approximate settlor’s intent  Constructive = to avoid fraud, injustice, unjust enrichment  Resulting = created to approximate settlor’s intent  Constructive = to avoid fraud, injustice, unjust enrichment

7-75 Intellectual Property  Intangible Resources  Creative Expression  Inventions/Marks  Intangible Resources  Creative Expression  Inventions/Marks

7-76 Intellectual Property  Intellectual Property (I.P.) is any property that is the product of an individual’s mind, e.g, books, software, movies, music.  U.S. Constitution protects I.P. in Article I Section 8. Congress shall: “promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.”  Intellectual Property (I.P.) is any property that is the product of an individual’s mind, e.g, books, software, movies, music.  U.S. Constitution protects I.P. in Article I Section 8. Congress shall: “promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.”

7-77 Trade Secret  Form Of Information  Owner Works To Keep Secret  Economic Value Derived From Secrecy  Theft = Misappropriation  Form Of Information  Owner Works To Keep Secret  Economic Value Derived From Secrecy  Theft = Misappropriation x

7-78 Patent Law  Patent- Exclusive Right Of Use For Period Of Time  Duration/Enforcement Utility- 20 Years Utility- 20 Years Plant- 17 Years Plant- 17 Years Design- 14 Years Design- 14 Years  Patent- Exclusive Right Of Use For Period Of Time  Duration/Enforcement Utility- 20 Years Utility- 20 Years Plant- 17 Years Plant- 17 Years Design- 14 Years Design- 14 Years

7-79 Patent Application Application Explanation Of Use/Manufacture Demonstrate Nonobvious, Novel, Useful Claim Describe What Is Being Patented

7-80 Patentable  Process  Machine  Matter Composition  Improvement Process Process Machine Machine Composition Composition  Nonfunctional Designs  Certain Plants  Business Methods  Process  Machine  Matter Composition  Improvement Process Process Machine Machine Composition Composition  Nonfunctional Designs  Certain Plants  Business Methods

7-81 Patent Infringement  Infringement. Manufacture, use or sale of another’s product or design without permission (license). Manufacture, use or sale of another’s product or design without permission (license).  Infringement. Manufacture, use or sale of another’s product or design without permission (license). Manufacture, use or sale of another’s product or design without permission (license).

7-82 Trademark Law  Registered- PTO  Recognizable/Distinctive  Types- Lanham Act(1946) Trademark Trademark Service Mark Service Mark Certification Mark Certification Mark Collective Mark Collective Mark  Registered- PTO  Recognizable/Distinctive  Types- Lanham Act(1946) Trademark Trademark Service Mark Service Mark Certification Mark Certification Mark Collective Mark Collective Mark R O

7-83 Trademark Law  Statutory Protection for Trademarks is found in: Federal Lanham Act of Federal Lanham Act of Federal Trademark Dilution Act of Federal Trademark Dilution Act of  Statutory Protection for Trademarks is found in: Federal Lanham Act of Federal Lanham Act of Federal Trademark Dilution Act of Federal Trademark Dilution Act of 1995.

7-84 Trademark Registration  Trademark Registration. U.S. Patent and Trademark Office gives notice to 3 rd parties. U.S. Patent and Trademark Office gives notice to 3 rd parties. A mark can be registered if already in use or will be used within 6 months. A mark can be registered if already in use or will be used within 6 months.  Trademark Registration. U.S. Patent and Trademark Office gives notice to 3 rd parties. U.S. Patent and Trademark Office gives notice to 3 rd parties. A mark can be registered if already in use or will be used within 6 months. A mark can be registered if already in use or will be used within 6 months.

7-85 Trademark Enforcement  Infringement  Counterfeit/Palm Off  Defenses: Not Distinctive/Generic (see Chart p.203) Not Distinctive/Generic (see Chart p.203) Little Chance Of Public Confusion Little Chance Of Public Confusion “Fair Use” “Fair Use”  Infringement  Counterfeit/Palm Off  Defenses: Not Distinctive/Generic (see Chart p.203) Not Distinctive/Generic (see Chart p.203) Little Chance Of Public Confusion Little Chance Of Public Confusion “Fair Use” “Fair Use”

7-86 Trademark- Internet  Internet Corporation For Assigned Names & Numbers v. Patent & Trademark Office  Metatag- Infringement?  Trademark Dilution  Internet Corporation For Assigned Names & Numbers v. Patent & Trademark Office  Metatag- Infringement?  Trademark Dilution

7-87 Related Concepts  Service Mark. Similar to trademark but used for services. Similar to trademark but used for services. Includes characters in TV and radio. Includes characters in TV and radio.  Trade Names. Applies to a business (not a product). Applies to a business (not a product).  Trade Dress. Image and appearance of a product or shop (Example: Starbucks coffee stores). Image and appearance of a product or shop (Example: Starbucks coffee stores).  Service Mark. Similar to trademark but used for services. Similar to trademark but used for services. Includes characters in TV and radio. Includes characters in TV and radio.  Trade Names. Applies to a business (not a product). Applies to a business (not a product).  Trade Dress. Image and appearance of a product or shop (Example: Starbucks coffee stores). Image and appearance of a product or shop (Example: Starbucks coffee stores).

7-88 Related Concepts  Domain Names. Trademarks in Cyberspace (example: Nike.com). Trademarks in Cyberspace (example: Nike.com). Conflicts—ICANN. Conflicts—ICANN.  Cyber-squatting. Occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name. Occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name Anti-cybersquatting Consumer Protection Act Anti-cybersquatting Consumer Protection Act.  Domain Names. Trademarks in Cyberspace (example: Nike.com). Trademarks in Cyberspace (example: Nike.com). Conflicts—ICANN. Conflicts—ICANN.  Cyber-squatting. Occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name. Occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name Anti-cybersquatting Consumer Protection Act Anti-cybersquatting Consumer Protection Act.

7-89 Related Concepts  Meta Tags Keywords in web pages used by internet search engines Keywords in web pages used by internet search engines Playboy Enterprises, Inc. v. Welles (Ninth Cir. February 1, 2002) Terri Welles, was Playmate of the Year for 1981 and Playboy defendant of She had a website offering information about and free photos of herself, advertised photos for sale, advertised membership in her photo club, and promoted her services as a spokesperson. While she specifically disclaimed any association with Playboy Enterprises, Playboy objected to the use of the trademarks "Playboy" and "Playmate" in the metatags of the website, use of the phrase "Playboy Playmate of the Year 1981" on the masthead and "Playmate of the Year 1981" on various banner ads and the repeated use of the abbreviation "PMOY '81" as the watermark on the pages of the website. Playboy Enterprise believes that these uses constituted trademark infringement, dilution, false designation of origin, and unfair competition. Playboy sued Welles and she then included in the website discussion of the suit and criticism of Playboy Enterprises. The Ninth Circuit found that except for the use of PMOY '81 in the wallpaper of Welles website, Welles use of Playboy's trademarks are permissible nominative use. They do not imply a current sponsorship or endorsement. The Court concluded that Welles used the marks only when no descriptive substitute exists, used no more of the mark than was necessary and that the use does nothing to suggest sponsorship or endorsement by the mark holder. Playboy Enterprises, Inc. v. Welles (Ninth Cir. February 1, 2002) Terri Welles, was Playmate of the Year for 1981 and Playboy defendant of She had a website offering information about and free photos of herself, advertised photos for sale, advertised membership in her photo club, and promoted her services as a spokesperson. While she specifically disclaimed any association with Playboy Enterprises, Playboy objected to the use of the trademarks "Playboy" and "Playmate" in the metatags of the website, use of the phrase "Playboy Playmate of the Year 1981" on the masthead and "Playmate of the Year 1981" on various banner ads and the repeated use of the abbreviation "PMOY '81" as the watermark on the pages of the website. Playboy Enterprise believes that these uses constituted trademark infringement, dilution, false designation of origin, and unfair competition. Playboy sued Welles and she then included in the website discussion of the suit and criticism of Playboy Enterprises. The Ninth Circuit found that except for the use of PMOY '81 in the wallpaper of Welles website, Welles use of Playboy's trademarks are permissible nominative use. They do not imply a current sponsorship or endorsement. The Court concluded that Welles used the marks only when no descriptive substitute exists, used no more of the mark than was necessary and that the use does nothing to suggest sponsorship or endorsement by the mark holder.  Meta Tags Keywords in web pages used by internet search engines Keywords in web pages used by internet search engines Playboy Enterprises, Inc. v. Welles (Ninth Cir. February 1, 2002) Terri Welles, was Playmate of the Year for 1981 and Playboy defendant of She had a website offering information about and free photos of herself, advertised photos for sale, advertised membership in her photo club, and promoted her services as a spokesperson. While she specifically disclaimed any association with Playboy Enterprises, Playboy objected to the use of the trademarks "Playboy" and "Playmate" in the metatags of the website, use of the phrase "Playboy Playmate of the Year 1981" on the masthead and "Playmate of the Year 1981" on various banner ads and the repeated use of the abbreviation "PMOY '81" as the watermark on the pages of the website. Playboy Enterprise believes that these uses constituted trademark infringement, dilution, false designation of origin, and unfair competition. Playboy sued Welles and she then included in the website discussion of the suit and criticism of Playboy Enterprises. The Ninth Circuit found that except for the use of PMOY '81 in the wallpaper of Welles website, Welles use of Playboy's trademarks are permissible nominative use. They do not imply a current sponsorship or endorsement. The Court concluded that Welles used the marks only when no descriptive substitute exists, used no more of the mark than was necessary and that the use does nothing to suggest sponsorship or endorsement by the mark holder. Playboy Enterprises, Inc. v. Welles (Ninth Cir. February 1, 2002) Terri Welles, was Playmate of the Year for 1981 and Playboy defendant of She had a website offering information about and free photos of herself, advertised photos for sale, advertised membership in her photo club, and promoted her services as a spokesperson. While she specifically disclaimed any association with Playboy Enterprises, Playboy objected to the use of the trademarks "Playboy" and "Playmate" in the metatags of the website, use of the phrase "Playboy Playmate of the Year 1981" on the masthead and "Playmate of the Year 1981" on various banner ads and the repeated use of the abbreviation "PMOY '81" as the watermark on the pages of the website. Playboy Enterprise believes that these uses constituted trademark infringement, dilution, false designation of origin, and unfair competition. Playboy sued Welles and she then included in the website discussion of the suit and criticism of Playboy Enterprises. The Ninth Circuit found that except for the use of PMOY '81 in the wallpaper of Welles website, Welles use of Playboy's trademarks are permissible nominative use. They do not imply a current sponsorship or endorsement. The Court concluded that Welles used the marks only when no descriptive substitute exists, used no more of the mark than was necessary and that the use does nothing to suggest sponsorship or endorsement by the mark holder.

7-90 Related Concepts Online Trademark Dilution - Trademarks can be diluted on the web.  Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD., Feb. 9,  PRELIMINARY INJUNCTIONDWYER, U.S. District Judge  On February 5, 1996, the application of plaintiff Hasbro, Inc. ("Hasbro") for a temporary restraining order came on for hearing by the court. Plaintiff appeared through Kenneth B. Wilson and Lisa G. Meckfessel of the law firm of Wilson, Sonsini, Goodrich & Rosati, and Jill D. Bowman of the law firm of Stoel Rives LLP. Defendants Internet Entertainment Group, Ltd., Brian Cartmell and Internet Entertainment Group, Inc. appeared through John D. Lowery and E. Russell Tarleton of the law firm of Graham James LLP/Riddell Williams P.S. After the oral decision was announced, the parties agreed that the ruling should be entered on a preliminary injunction rather than merely as a temporary restraining order.  Having considered all papers submitted in support of said motion and in opposition thereto, and having heard oral argument in open court, the court finds that:  1. Hasbro is the owner of the trademark "CANDY LAND," which has been registered on the Principal Register of the United States Patent and Trademark Office since 1951,  2. Hasbro has demonstrated a probability of proving that defendants Internet Entertainment Group, Ltd., Brian Cartmell and Internet Entertainment Group, Inc. (collectively referred to as "defendants") have been diluting the value of Hasbro's CANDY LAND mark by using the name CANDYLAND to identify a sexually explicit Internet site, and by using the name string "candyland.com" as an Internet domain name which, when typed into an Internet-connected computer, provides Internet users with access to that site.  3. Hasbro has demonstrated a likelihood of prevailing on its claims that defendants conduct violates the federal trademark anti-dilution statute, 15 U.S.C. section 1125(c), and the Washington State trademark anti- dilution statute, RCW  4. Hasbro has shown that defendants' use of the CANDY LAND name and the domain name candyland.com in connection with their Internet site is causing irreparable injury to Hasbro.  5. The probable harm to Hasbro from defendants' conduct outweighs any inconvenience that defendants will experience if they are required to stop using the CANDYLAND name.  6. The public interest favors entry of a preliminary injunction on the facts of this case. Online Trademark Dilution - Trademarks can be diluted on the web.  Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD., Feb. 9,  PRELIMINARY INJUNCTIONDWYER, U.S. District Judge  On February 5, 1996, the application of plaintiff Hasbro, Inc. ("Hasbro") for a temporary restraining order came on for hearing by the court. Plaintiff appeared through Kenneth B. Wilson and Lisa G. Meckfessel of the law firm of Wilson, Sonsini, Goodrich & Rosati, and Jill D. Bowman of the law firm of Stoel Rives LLP. Defendants Internet Entertainment Group, Ltd., Brian Cartmell and Internet Entertainment Group, Inc. appeared through John D. Lowery and E. Russell Tarleton of the law firm of Graham James LLP/Riddell Williams P.S. After the oral decision was announced, the parties agreed that the ruling should be entered on a preliminary injunction rather than merely as a temporary restraining order.  Having considered all papers submitted in support of said motion and in opposition thereto, and having heard oral argument in open court, the court finds that:  1. Hasbro is the owner of the trademark "CANDY LAND," which has been registered on the Principal Register of the United States Patent and Trademark Office since 1951,  2. Hasbro has demonstrated a probability of proving that defendants Internet Entertainment Group, Ltd., Brian Cartmell and Internet Entertainment Group, Inc. (collectively referred to as "defendants") have been diluting the value of Hasbro's CANDY LAND mark by using the name CANDYLAND to identify a sexually explicit Internet site, and by using the name string "candyland.com" as an Internet domain name which, when typed into an Internet-connected computer, provides Internet users with access to that site.  3. Hasbro has demonstrated a likelihood of prevailing on its claims that defendants conduct violates the federal trademark anti-dilution statute, 15 U.S.C. section 1125(c), and the Washington State trademark anti- dilution statute, RCW  4. Hasbro has shown that defendants' use of the CANDY LAND name and the domain name candyland.com in connection with their Internet site is causing irreparable injury to Hasbro.  5. The probable harm to Hasbro from defendants' conduct outweighs any inconvenience that defendants will experience if they are required to stop using the CANDYLAND name.  6. The public interest favors entry of a preliminary injunction on the facts of this case.

7-91 Related Concepts Online Trademark Dilution - Trademarks can be diluted on the web. Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD., eb. 9,  PRELIMINARY INJUNCTIONDWYER, U.S. District Judge  THEREFORE, IT IS HEREBY ORDERED that Hasbro's motion for preliminary injunction is granted. Defendants Internet Entertainment Group, Ltd., Brian Cartmell, and Internet Entertainment Group, Inc., and their officers, agents, servants, employees and attorneys, and those persons in active concert and participation with defendants who receive actual notice of this preliminary injunction, are enjoined from directly or indirectly using the name CANDYLAND or the Internet domain name "candyland.com," or any similar name which is likely to dilute the value of Hasbro's CANDYLAND mark, in connection with the advertising, operation or maintenance of any Internet site, including but not limited to any Internet-site containing sexually explicit material or other pornographic content. Defendants are directed to immediately make affirmative efforts to stop, cancel or discontinue any previously purchased advertising which refers to the name CANDY LAND or the Internet domain name "candyland.com."  IT IS FURTHER ORDERED that defendants shall immediately remove all content from the "candyland.com" site. However, defendants shall be allowed to post a "referral notice" at the URL address "http: until May 5, 1996, which shall provide the new location of defendants' Internet site. The referral notice shall not contain any hyperlink to defendants' new site or sites, or to any other site. After the expiration of the 90 day referral period, defendants must remove the referral notice and thereafter discontinue any use, either direct or indirect, of the name domain name "candyland.com."  IT IS FURTHER ORDERED that Hasbro shall not be required to post a bond pursuant to Federal Rule of Civil Procedure 65(c) in connection with this preliminary injunction, as defendants expressly waived any bond requirement relating to this order at the preliminary injunction hearing. Online Trademark Dilution - Trademarks can be diluted on the web. Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD., eb. 9,  PRELIMINARY INJUNCTIONDWYER, U.S. District Judge  THEREFORE, IT IS HEREBY ORDERED that Hasbro's motion for preliminary injunction is granted. Defendants Internet Entertainment Group, Ltd., Brian Cartmell, and Internet Entertainment Group, Inc., and their officers, agents, servants, employees and attorneys, and those persons in active concert and participation with defendants who receive actual notice of this preliminary injunction, are enjoined from directly or indirectly using the name CANDYLAND or the Internet domain name "candyland.com," or any similar name which is likely to dilute the value of Hasbro's CANDYLAND mark, in connection with the advertising, operation or maintenance of any Internet site, including but not limited to any Internet-site containing sexually explicit material or other pornographic content. Defendants are directed to immediately make affirmative efforts to stop, cancel or discontinue any previously purchased advertising which refers to the name CANDY LAND or the Internet domain name "candyland.com."  IT IS FURTHER ORDERED that defendants shall immediately remove all content from the "candyland.com" site. However, defendants shall be allowed to post a "referral notice" at the URL address "http: until May 5, 1996, which shall provide the new location of defendants' Internet site. The referral notice shall not contain any hyperlink to defendants' new site or sites, or to any other site. After the expiration of the 90 day referral period, defendants must remove the referral notice and thereafter discontinue any use, either direct or indirect, of the name domain name "candyland.com."  IT IS FURTHER ORDERED that Hasbro shall not be required to post a bond pursuant to Federal Rule of Civil Procedure 65(c) in connection with this preliminary injunction, as defendants expressly waived any bond requirement relating to this order at the preliminary injunction hearing.

7-92 Copyright Law  Requirements- Copyrights Original Work Original Work Tangible Medium Tangible Medium Creative Creative  Protects Authors Not Inventors- Fair Use  Digital Millennium Copyright Act (1998)  Requirements- Copyrights Original Work Original Work Tangible Medium Tangible Medium Creative Creative  Protects Authors Not Inventors- Fair Use  Digital Millennium Copyright Act (1998)

7-93 Copyright Law  Copyright: Intangible property right granted by federal statute to the author for life plus 70 years. Intangible property right granted by federal statute to the author for life plus 70 years. Automatic protection. Automatic protection. What is Protected Expression? Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is. What is Protected Expression? Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is.  Copyright: Intangible property right granted by federal statute to the author for life plus 70 years. Intangible property right granted by federal statute to the author for life plus 70 years. Automatic protection. Automatic protection. What is Protected Expression? Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is. What is Protected Expression? Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is.

7-94 Copyright Infringement  Infringement. Form or expression is copied (does not have to be in its entirety). Form or expression is copied (does not have to be in its entirety). Penalties, damages and criminal action are possible. Penalties, damages and criminal action are possible. Exception: “Fair Use”. Exception: “Fair Use”.  Certain persons or organization can copy materials without penalty (e.g., education, news, research).  Infringement. Form or expression is copied (does not have to be in its entirety). Form or expression is copied (does not have to be in its entirety). Penalties, damages and criminal action are possible. Penalties, damages and criminal action are possible. Exception: “Fair Use”. Exception: “Fair Use”.  Certain persons or organization can copy materials without penalty (e.g., education, news, research).

7-95 Copyright  Copyright Protections for Software Computer Software Copyright Act Computer Software Copyright Act.  Copyright Protections for Software Computer Software Copyright Act Computer Software Copyright Act.

7-96 Copyright  Copyright Act of 1976: Copy of a program into RAM is infringement. Copy of a program into RAM is infringement. Revision or re-sale of freelance authors works can be infringement. Revision or re-sale of freelance authors works can be infringement.  Copyright Act of 1976: Copy of a program into RAM is infringement. Copy of a program into RAM is infringement. Revision or re-sale of freelance authors works can be infringement. Revision or re-sale of freelance authors works can be infringement.

7-97 Copyright  MP3 and File-Sharing The Supreme Court, in the 1984 case Sony v. Universal City, said that “time- shifting” was a fair use. The Court defined time-shifting as "recording a program to view it once at a later time, and thereafter erasing it.“ To stop production of VCRs, a “staple of the marketplace,” the Court held in Sony v. Universal City, would be an unfair use of the copyright principle. Although the Court noted that many VCR owners do not erase tapes of copyrighted programming after watching them, it found that VCR manufacturers could not be held responsible for such behavior, and that manufacturers were not liable for any copyright violations by third parties. (Copying free programming for noncommercial, private viewing is now seen as "fair use" under copyright law.) As recording technology advanced, the concept of "space-shifting" arose. Space-shifting was given limited protection by the 9th U.S. Circuit Court of Appeals in Recording Industry Association of America v. Diamond Multimedia, a 1999 case in which the court defined space-shifting, in the context of digital music, as transferring copyrighted material from a CD already owned by the transferor to another medium for the essentially exclusive use of the transferor. Such transfers were found to fall within the fair-use provisions of copyright law, so that the manufacturer of the Diamond Rio MP3 player was allowed to market its product. However, in A&M Records v. Napster, the 9th Circuit refused to extend the definition of space-shifting to allow people to copy music that they did not own a physical copy of, or to allow people to place copyrighted music online where anyone (including people who owned no physical copy) could copy it without permission from the copyright holder. The Supreme Court, in the 1984 case Sony v. Universal City, said that “time- shifting” was a fair use. The Court defined time-shifting as "recording a program to view it once at a later time, and thereafter erasing it.“ To stop production of VCRs, a “staple of the marketplace,” the Court held in Sony v. Universal City, would be an unfair use of the copyright principle. Although the Court noted that many VCR owners do not erase tapes of copyrighted programming after watching them, it found that VCR manufacturers could not be held responsible for such behavior, and that manufacturers were not liable for any copyright violations by third parties. (Copying free programming for noncommercial, private viewing is now seen as "fair use" under copyright law.) As recording technology advanced, the concept of "space-shifting" arose. Space-shifting was given limited protection by the 9th U.S. Circuit Court of Appeals in Recording Industry Association of America v. Diamond Multimedia, a 1999 case in which the court defined space-shifting, in the context of digital music, as transferring copyrighted material from a CD already owned by the transferor to another medium for the essentially exclusive use of the transferor. Such transfers were found to fall within the fair-use provisions of copyright law, so that the manufacturer of the Diamond Rio MP3 player was allowed to market its product. However, in A&M Records v. Napster, the 9th Circuit refused to extend the definition of space-shifting to allow people to copy music that they did not own a physical copy of, or to allow people to place copyrighted music online where anyone (including people who owned no physical copy) could copy it without permission from the copyright holder.  MP3 and File-Sharing The Supreme Court, in the 1984 case Sony v. Universal City, said that “time- shifting” was a fair use. The Court defined time-shifting as "recording a program to view it once at a later time, and thereafter erasing it.“ To stop production of VCRs, a “staple of the marketplace,” the Court held in Sony v. Universal City, would be an unfair use of the copyright principle. Although the Court noted that many VCR owners do not erase tapes of copyrighted programming after watching them, it found that VCR manufacturers could not be held responsible for such behavior, and that manufacturers were not liable for any copyright violations by third parties. (Copying free programming for noncommercial, private viewing is now seen as "fair use" under copyright law.) As recording technology advanced, the concept of "space-shifting" arose. Space-shifting was given limited protection by the 9th U.S. Circuit Court of Appeals in Recording Industry Association of America v. Diamond Multimedia, a 1999 case in which the court defined space-shifting, in the context of digital music, as transferring copyrighted material from a CD already owned by the transferor to another medium for the essentially exclusive use of the transferor. Such transfers were found to fall within the fair-use provisions of copyright law, so that the manufacturer of the Diamond Rio MP3 player was allowed to market its product. However, in A&M Records v. Napster, the 9th Circuit refused to extend the definition of space-shifting to allow people to copy music that they did not own a physical copy of, or to allow people to place copyrighted music online where anyone (including people who owned no physical copy) could copy it without permission from the copyright holder. The Supreme Court, in the 1984 case Sony v. Universal City, said that “time- shifting” was a fair use. The Court defined time-shifting as "recording a program to view it once at a later time, and thereafter erasing it.“ To stop production of VCRs, a “staple of the marketplace,” the Court held in Sony v. Universal City, would be an unfair use of the copyright principle. Although the Court noted that many VCR owners do not erase tapes of copyrighted programming after watching them, it found that VCR manufacturers could not be held responsible for such behavior, and that manufacturers were not liable for any copyright violations by third parties. (Copying free programming for noncommercial, private viewing is now seen as "fair use" under copyright law.) As recording technology advanced, the concept of "space-shifting" arose. Space-shifting was given limited protection by the 9th U.S. Circuit Court of Appeals in Recording Industry Association of America v. Diamond Multimedia, a 1999 case in which the court defined space-shifting, in the context of digital music, as transferring copyrighted material from a CD already owned by the transferor to another medium for the essentially exclusive use of the transferor. Such transfers were found to fall within the fair-use provisions of copyright law, so that the manufacturer of the Diamond Rio MP3 player was allowed to market its product. However, in A&M Records v. Napster, the 9th Circuit refused to extend the definition of space-shifting to allow people to copy music that they did not own a physical copy of, or to allow people to place copyrighted music online where anyone (including people who owned no physical copy) could copy it without permission from the copyright holder.